;JP;ZATNI ARBI;

;JP;ZATNI ARBI;
ANPAc..r..
IT-Japan-phone
JP/17/ZATNI

Japan joining Korea
in driving CDMA2000

(2x20 pts)

Zatni Arbi
Columnist
Tokyo
zatni@cbn.net.id

"No wonder your voice is crystal-clear," my brother said when I
told him I was calling from Tokyo. No wonder, indeed. Each time
we talk to someone in Singapore, Japan, the U.S. and any other
countries with advanced telecommunication infrastructure, it is
easier to believe that he is just next door.

That is not always the case, though, as even calls from the
same house using two different phone lines may still be plagued
by a lot of crackling and popping noises and muffled voice. The
fact is that the two telephones will still have to connect via a
switch. It means that the conversation has to go through the
local infrastructure, which is obviously does not offer the best
possible quality of service.

However, my brother became even more impressed when I told him
I was talking to him using an a u (pronounced `ey yu') cell phone
provided by KDDI, currently the fastest growing telecom operator
in Japan.

Qualcomm, the company whose technology is used by KDDI,
invited groups of IT journalists from Indonesia, Taiwan and
Vietnam to see how CDMA is being used in Japan to offer new and
more sophisticated mobile services besides simple voice
communication. My IT journalist colleagues and I were allowed to
call anybody anywhere in Indonesia -- or anywhere in the world
through KDDI direct dialing service -- as necessary. All we had
to do was to punch 001 010, followed by the country code number
and the mobile or fixed line number that we wanted to reach.

Not surprisingly, everyone seemed to be continuously talking
to family members, relatives and friends in Jakarta, Ho Ci Minh
City, Taipei and God knows where else. We were continuously
testing the network by making calls from inside our coach, from
Tokyo's famous underground stations and from the restaurant on
top of the New Otani Tower Hotel, and we never experienced any
problem at all.

The reliability and availability of the network were, to put
it mildly, very impressive. The only time I failed to reach my
wife's phone number was when she was on her way to Glodok, and it
was because Telkomsel's - and not KDDI's -- network was busy.

* A cell phone heaven

Those with some interest in mobile telecommunication will
certainly be familiar with the fact that Japan is one of the
countries with the highest mobile phone penetration. At the end
of last June, the number of the country's cellular subscribers
was around 77 million, or 60 percent of their total population.

Three major operators serve Japan's 127 million population.
These are Nippon Telegraph and Telephone Corp. (NTT), KDDI, and
J-Phone (which has been acquired by Vodaphone). Established in
1952, NTT has been serving the country for the longest time. It
is not surprising that the company is serving the largest number
of subscribers, i.e., 44 million as of June 2003. KDDI comes
second with a total of 14.7 million subscribers and J-Phone has
14.4 millions.

Today, only three types of cellular technologies are in use in
Japan. The majority of phone lines were still using the Personal
Digital Communication (PDC) the CDMA2000 and the W-CDMA. PDC is
offered by all the three operators, while CDMA2000 is offered
only by KDDI and W-CDMA is provided by both NTT DoCoMo and J-
Phone.

As of December 2002, 60 million (82 percent) of cellular
subscribers are using PDC, 13 million were using CDMA2000 and
153,000 (0.2 percent) were using W-CDMA. One thing to keep in
mind here is that W-CDMA, unfortunately, stands for Wideband CDMA
and is the third generation of the GSM technology and has little
to do with Qualcomm-developed CDMA technology.

Interestingly, however, the number of CDMA2000 1x had jumped
to 8.6 million by the end of last June, while the number of W-
CDMA subscribers -- according to data provided by
Telecommunication Carrier Association -- was 590,000 (535,000
were subscribers of NTT DoCoMo's FOMA and 55,000 were subscribers
of J-Phone's UMTS).

What this tells us is that the acceptance rate of CDMA2000 1x
as the next generation of mobile telephone far exceeded that of
W-CDMA (both FOMA and UMTS). According to company data, the
number of CDMA2000 1x subscribers reached eight million on May 29
this year, while the number of W-CDMA did not grow much. This is
naturally very encouraging news to KDDI -- and Qualcomm, but not
so for the GSM-based W-CDMA front as Japan was actually
considered the breeding ground for this GSM technology.

There seem to be a number of reasons for the strong pickup of
CDMA2000 1x. First, according to Qualcomm's officials, upgrading
the infrastructure from cdmaOne-which is considered to represent
the second generation (2G) of the CDMA technology to the next
levels, which include high-speed data capability, does not
require as much investment as what it would take GSM operators to
migrate to W-CDMA.

Secondly, in the case of Japan, the inability of the W-CDMA
subscribers to roam nationwide still leaves them hesitant in
changing their handsets from 2G to 3G, which prevents them from
taking advantage of the W-CDMA capabilities. There are other
reasons for the slower growth of W-CDMA, including the inability
of the parties involved in coming up more quickly with standard
specifications.

Meanwhile, the Japanese market has been obviously embracing
mobile data communication more than ever before. In the last
three years alone, for example, there has been a five-fold growth
in the number of Mobile Internet Subscribers, from less than 13
million to almost 65 million. An upcoming version of CDMA2000 1x,
known as CDMA2000 1xEVDO, promises very good data handling
capability, and this makes it a good choice for mobile Internet
services. The main strength of the CDMA2000 1xEVDO lies in the
fact that, from the ground up, it was designed for the IP
(Internet Protocol) network rather than the voice network.

I also had the chance to visit one of the biggest stores in
Shinjuku, where I saw a breathtaking array of cell phones. As you
would have guessed, most of the newer models already came with
the cameras, which means that demand for video mail and other
multimedia transmission capability is set to explode.

Even Casio-made cell phones that we were using during our stay
in Tokyo had the capability of capturing up to 15 seconds of
video. Sending the video clips will certainly require an
infrastructure optimized for this type of data. This gives KDDI-
and Qualcomm-reasons to be very optimistic about their future in
Japan-and the rest of Asia.

Another driving factor for the growth in mobile data services
is certainly the content industry. KDDI has been working together
with thousands of content providers in Japan. Their subscribers
have been downloading Chaku Uta, or the music ringer tones like
crazy. Next week we will take a look at two of very useful
applications-location based services and security-offered by
KDDI's partners. Content providing and application services are
two areas that we have to look into intensely, as they provide a
lot of new business opportunities.